CENTRAL ARBITRATION COMMITTEE
TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT
1992
SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION
DETERMINATION OF THE BARGAINING UNIT
The Parties:
CATU
and
Industrial Agricultural
Engineers
Introduction
1. CATU (the Union) submitted an
application to the CAC dated 25 March 2004 that it should be recognised for
collective bargaining by Industrial Agricultural Engineers (the Employer) for
‘(a)ll shop floor workers at the Riverside Works, Macclesfield Road, Leek,
Staffordshire, ST13 8LB, not including any office staff, works managers or
foremen’. The CAC gave both Parties
notice of receipt of the application on
2. In accordance with section 263 of the
Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC
Chairman established a Panel to deal with the case. The Panel consisted of Professor Frank
Burchill, Panel Chairman, and, as Members, Mr David Bower and Ms Bronwyn
McKenna. The Case Manager appointed to
support the Panel was Nigel Cookson.
3. By a decision dated
Submissions made by the Trade Union
4. The Union opened by explaining that it
was a traditional craft based union that historically concentrated on the
ceramic industry with over 90% of its members employed in the Stoke on Trent
area. The Union had been greatly
affected by the decline in the industry such that its membership had fallen
from 20,000 in 1997 to 10,000 by 2003. To
counter this it moved out into the community where it met with some success. There was, it submitted, no model for what
was an appropriate union for an industry.
5. The Union was first approached by
workers from the Macclesfield Road site in 2003. The workers had concerns over Health and
Safety matters, and what they described as the prevailing bullying culture. They also believed that the site could close
and the workers be relocated. The Union
limited its activity to this site, at no time targeting workers elsewhere even
though it had members amongst the workers at the other sites. It identified Macclesfield Road as a
bargaining unit: the members saw themselves as separate and distinct from
workers at the Employer’s sites elsewhere.
The fact that this site was, out of all the Employer’s sites, furthest
away from the new site at Longton, also contributed to this belief.
6. Membership at the Macclesfield Road
site (which for the purposes of this application included the Laser Shop,
currently referred to by the Employer as the Abbey Green Road site) soon grew to over 50% of the
workforce. The other small site in Leek
at Barnfields was not targeted for recruitment as belief was this site would be
closing down with the workers being moved to the new site in Longton, some 15
miles away.
7. In February of 2004 the Union served
the Employer with a letter in accordance with Schedule A1 to the Act (the Schedule)
requesting official recognition for shopfloor workers employed on the
Macclesfield Road site.
8. The Union did not actively recruit at
the other sites because its main concern was with its members at Macclesfield
Road, but also because the majority of the workers based there, and the Union, believed
that Macclesfield Road was both distinct and separate from the other sites and
was therefore an appropriate bargaining unit.
9. There were several reasons why Macclesfield
Road should be treated as a separate site, and why such a bargaining unit was
well within the boundaries of compatibility with effective management.
10. The Employer had three other sites in the group apart from the Leek
site. These were Mossfield Road in
Longton, Cheadle and Milton.
Geographically, the Macclesfield Road site was detached from the rest of
the group and had been in operation longer than the others.
11. The Employer had, in June 2001,
established a Company Council. However,
the Union believed this was to counter an approach by another union enquiring
about recognition. The Union also explained
that the Company Council had only recently become active after a period of
inactivity. This revival of the Council
was, the
12. Although the Employer hoped to move all
production to the site at Longton, eventually operating the entire
manufacturing business from there, this was only a hope for the long term. Meanwhile, the Leek site had issues which
needed to be addressed immediately.
13. The Employer would argue that terms and
conditions were the same over all sites.
In truth, there were 39 different pay scales and three different shift allowances
operating across the company with only a limited number in force at the
Macclesfield Road site.
14. As to the mobility clause in the
workers’ contracts the Union argued it was not a standard mobility clause. It agreed with the reasoning behind the
clause in that it added to the flexibility of the company. However, since the formal request in February
2004, it had been predominantly union members from the proposed bargaining unit
that had been moved between sites.
15. The Employer had also targeted the
Macclesfield Road site with anti-union literature that was not distributed to the
other sites. It also gave workers at
Macclesfield Road a form with which to cancel their union membership and provided
a stamped envelope in which the workers could return the forms. Some forms had
been received in envelopes that had been franked by the Employer. This, the Union argued, proved beyond doubt
that the Employer treated the Macclesfield Road site as distinct.
16. During talks between the Parties and
Acas, the Employer proposed that the bargaining unit be extended to cover all
of the sites. The Employer would allow
the Union access to the sites with a ballot to follow. Although the Union considered the proposal,
the Employer stated that it would hold four separate ballots and obtain four
separate results before deciding on recognition. It also proposed to allow the Union limited
access to the workforce. This access
would not enable the Union to realistically speak to every worker eligible to
vote. This proposal was unacceptable to
the Union. Under the Employer’s
proposal, even if the Union won the ballot at the Macclesfield Road site but
lost just one of the other three ballots, it would have to forfeit recognition
for the members at Macclesfield Road.
The Union pointed out that the Employer took the step of creating four
separate bargaining units in the proposal put to the Union. This, the Union decided, was because management
viewed the company as split into four distinct sections, with the Leek site
separate from the others.
17. The Union was not averse to representing
workers across all the sites but stated that, at this moment in time, it was
concentrating on the one site, as it and its members viewed it as a separate
bargaining unit.
18. The Union appreciated that one of the
major arguments against its proposed bargaining unit was the desire to avoid a
small, fragmented bargaining unit within the company. It understood the desire to avoid
overcomplicating industrial relations, but, nonetheless, it did not feel that
the Employer having other similar sized sites, was justification for
disregarding its claim for this bargaining unit. The Union referred to examples of multi-site companies
in which recognition agreements were in place at one location only. This confirmed the Union’s view that it was
not unusual for recognition to be granted in respect of only one site when a
bargaining unit was identified as being distinct from other sites within the
same company.
19. The Union closed by submitting that the
Employer claimed that industrial relations between the Parties had been damaged
as a result of the recognition campaign.
However, the Union disagreed with this view. On each occasion that a representative of the
Union had visited the Employer they had been treated with courtesy and
respect. The Union prided itself on the
good industrial relations it had established with employers. The Union, however, had always viewed the Macclesfield
Road site as a separate bargaining unit, as did the members employed there. They perceived themselves to be separate and
distinct from the workers elsewhere.
This was why the Union had not canvassed the other locations even though
it had members at the other sites. When
the Union was approached in 2003 by workers from the Macclesfield Road site the
arguments and problems raised were specific to that site.
20. The Employer had set great store by its Company
Council. However, the Union asked why
the Council had not been set up earlier.
It questioned whether the motive in establishing the Council was because
of the move to Longton or simply because another union had approached the
Employer. The Union believed that it was
because of the latter that the Council was formed. Then activity went quiet until the Union put
in its request for recognition and a Council meeting was held shortly
thereafter. The Union envisaged that a
local Union representative would sit on the Council alongside representatives
from the other sites. This set up would
enhance industrial relations rather then damage them.
21. The Employer had also set store in the
relationship between the various sites but the Union pointed to the fact that
the mobility clause only referred to the temporary transfer of workers.
22. The Union referred to the events
surrounding its meeting with the Employer and Acas and submitted that it was
the Employer that had suggested four separate ballots. It disagreed with the Employer’s submission
that Acas had said it could not conduct one ballot as to do so would contravene
Acas rules.
23. The Union did not accept the Employer’s
argument that the proposed bargaining unit was not compatible with effective
management. Similar bargaining
arrangements were in place with other employers on a plant by plant basis. As
to the Employer’s claim that it operated a one-operation culture across all of
its sites, the Union suggested that this was more an aspiration than
reality.
24. If the Panel determined the appropriate
bargaining unit encompassed shop floor workers throughout the company, the
Union would be put at a serious disadvantage given that the Employer had
already distributed anti-union literature across the other sites.
Submissions made by the
Employer
25. The Employer explained that it was
Europe’s leading manufacturer of high quality agricultural equipment,
equestrian equipment, steel railings and fences. It was a family run business and had six
sites located within an 11 mile area at Leek, Milton, Cheadle and Longton, all
in Staffordshire. There were three factories at Leek; Macclesfield Road, Abbey
Green Road and Barnfields Industrial Estate. There were three separate
operations in Longton; assembly, galvanising and distribution. It employed over
400 staff across all of its sites.
26. The Union’s application for recognition was
in respect of the Macclesfield Road site only. The Employer had consistently
disagreed with the proposed bargaining unit in both the statutory process and
the discussions involving voluntary recognition believing that the bargaining
unit was incorrect and misconceived.
Originally the Employer had argued for all workers bar directors and
while it still believed that foremen should be included in the bargaining unit
it did not intend to argue this point.
Instead, the Employer submitted, the appropriate bargaining unit was all
shop-floor workers across all six sites.
27. It was aware, following the case of R v Central Arbitration Committee and
another ex. parte Kwik-Fit (GB) Limited [2002] (EWCA Civ 512), that while
the statutory test was set at the comparatively modest level of
appropriateness, rather than of the optimum or best possible outcome, the CAC
must not confine itself to the Union’s arguments but had to take into account
the statutory considerations, including effective management and the views of
the employer.
28. The Union’s proposed bargaining unit of
shop-floor workers located solely at the Macclesfield Road site was not
compatible with effective management and had been proposed without regard to,
or proper understanding of, the structure of the company. It was contrived, defined and built around
the one site where the Union believed it had the most support. It was therefore artificial and potentially
divisive as it went against the Employer’s culture of “one operation”.
29. The lack of individuality within sites
meant that the work and/or workers were interchangeable. For example, a machine could be at
Macclesfield Road and then moved to either the Laser Shop or Milton. In most cases a product would begin at one of
the sites in Leek and then be sent to Mossfield to be galvanised and
distributed.
30. Since its foundation the company had
grown steadily over the years and was now a successful amalgamation. Neither the workers, nor senior management, nor
the board of directors treated the sites as separate entities; they considered
them to be part of the whole. To allow segregation of Macclesfield Road through
the recognition of this site only, would cause a fragmentation of the units
within IAE.
31. The Employer’s counter-proposal of
shop-floor workers across all the sites had been rejected by the Union. The Employer suggested that this was based on
the level of Union support and not for the benefit of the workers, company
council or the future of the company.
32. The Employer referred the Panel to the
decision of TGWU and DHL Aviation (UK)
Limited (TUR1/15/2000). In this
decision the Panel determined that the appropriate bargaining unit needed to be
manageable so that it fitted with the company’s existing management structure;
easily definable to avoid any arguments about which workers were or were not
covered by it; consistent with the existing employee communications forum
arrangements to avoid creating conflicting lines of communication; and compatible
with the existing one-team culture which had been established with all workers
on the same terms and conditions. The
Employer submitted that should the Panel apply these principles to the proposed
bargaining unit in the present case, it would fail on all four counts.
33. The Employer submitted that as a family
run company, based solely in Staffordshire, it was not possible for the Panel
to refer to existing national and local bargaining arrangements. However, in response to direct questioning by
the Union the Employer stated that the Company Council did have a role in
collective bargaining.
34. It referred the Panel to the case of GMB Belmont Bleaching and Dyeing Company
Limited (TURI/227/2002) and in particular to the fact that it was a long
established, small, family-owned operation where the company had argued that
the bargaining unit should be one that comprised the entire workforce apart
from three directors. Although the Panel
in that case did not consider the entire workforce to be an appropriate
bargaining unit it considered that it was instead all hourly paid workers at
the Company’s premises rather than a section of workers within one location.
35. All workers enjoyed the same terms and
conditions at each of the sites. The
Employer produced a single information binder which covered all workers. The following terms and conditions were
common throughout all of the sites: absenteeism and record forms, rules and
disciplinary procedures, right of appeal; grievance procedure, holiday
entitlement and guidelines, sickness absence rules and procedures, working
arrangements, pension, shift patterns, weekly hours, break patterns, overtime,
single pay system and single system of salary rates.
36. The decisions on pay, hours and holidays
were taken by the board with negotiations between the Chairman and the Company Council
without third party intervention. The
yearly pay increase was decided by the directors and applied to every worker
regardless of their location. Individual
sites were not given different pay increases depending on the profits from that
one site.
37. The majority of shop-floor workers were
employed as general workers, unskilled and trained to operate certain machines
with the possibility that further training may be necessary if they were moved
to other machinery. The Employer also
relied on the standard mobility clause in the workers’ contracts of employment
where shop-floor workers could, and have been, asked to work on other sites,
either on a temporary or permanent basis.
This point was made to the CAC several times. The Employer produced to the Panel a list
showing those workers that had transferred between sites for commercial
reasons. The bargaining unit proposed by
the Union would inhibit the flexible movement of labour which it relied on to
avoid compulsory redundancies and other staff development opportunities. It would also cut across the established
grade system, established terms and conditions and generic HR system. The company’s “one” operation was underpinned
and cemented by common terms and conditions of employment.
38. The Employer referred to TGWU/GMB v Gala Casinos limited (TURI
/206/2002) and submitted that similar grounds existed in this case.
39. Further, the bargaining unit proposed by
the Union would add greatly to the costs of the company, thereby reducing pay
increases and profit, as well as creating scope for suspicion and rumour that
groups were being treated unequally. It
could potentially destroy many of the common features and systems associated
with the Employer’s approach to its workers.
40. It was important to note the structure
comparison between the sites and that, although most of the administrative
staff including the HR manager, were based predominantly at Macclesfield Road,
this was purely historical and may not necessarily be the case in the future. The roles of HR and MD were not site specific
and together they effectively operated and worked as a single unit. This characteristic would be undermined by
the Union’s proposed bargaining unit as it selected some workers within one
site and excluded others.
41. In June 2001 a Company Council was
established with representatives from across the six sites. Although each site had the right to elect a
representative to the Council, this right was designed to facilitate
communication, not to give workers their own site “representative”. The Council represented the views of all
workers and policies implemented benefited all.
Although aware that the Company Council could work in conjunction with
the Union, this would make the constitution of the Council very
problematic. The shop-floor workers at
Macclesfield Road would be represented by the Union whereas the majority of
workers and Council representatives would not.
42. If the Panel determined the appropriate bargaining
unit was Macclesfield Road, fragmented bargaining could develop and there would
be a risk of multi-unionism emerging in the future and competing with the
bargaining unit. As the proposed
bargaining unit represented only 27% (this figure already having changed since
the submissions were prepared) fragmentation would undoubtedly occur. Management’s time and cost of dealing both
with fragmentation and the additional resources required for collective
bargaining at one site, but not the others, would be extensive and not in the
best interests of the workers or the company as a whole.
43. The ongoing plans to move four
manufacturing sites to a purpose-built 24 acre site in Longton had been
discussed with all of its workers. Some
shop-floor workers presently employed at the Macclesfield Road site would, over
the next two years, be relocated to Longton.
To prevent problems with union members losing the right to collective
bargaining through relocation from Macclesfield Road, it should not be isolated
as a separate site.
44. The Union had not applied any logic to
its proposed bargaining unit and had, in regard to management structure, terms
and conditions, Company Council and pay scale and grades, failed to understand
the prevailing characteristic of “oneness” across all of the sites. The continuing success of the company could
potentially be damaged by the adoption of the Union’s proposed bargaining
unit. This success depended on existing
sites and the new proposed site working together with flexibility. Adoption of a site- based bargaining unit
would neither be fair, for example to those in the same grades but excluded
from it on the basis of location or function, nor efficient.
45. While the Employer acknowledged that the
decisions referred to are not authoritative they demonstrated the thinking of
the CAC when asked to consider similar questions. The underlying theme was the desire of the CAC
to maintain the “one culture” company and prevent fragmentation. This was evident in both UNIFI and Nottingham Building Society (TUR l/38/2003) and TGWU v BP Chemicals Ltd (TUR1/281/2003).
46. In closing the Employer referred the
Panel to paragraph 171 of the Schedule which provided that “in exercising
functions under this Schedule in any particular case the CAC must have regard
to the object of encouraging and promoting fair and efficient practices and
arrangements in the workplace, so far as having regard to that object is
consistent with applying other provisions of this Schedule in the case
concerned’. It submitted that a
bargaining unit which challenged the structure of the company, which split the
sites and prevented integration, would be an anathema to this principle. The Employer urged that the Panel used its
discretion and it submitted that the appropriate bargaining unit should be all
shop-floor workers across all sites.
Considerations
47. The Panel is required, by paragraphs
19(3)(a) and (b) of the Schedule, to decide the appropriate bargaining unit and
in making that decision to take into account the need for the unit to be
compatible with effective management and the matters listed in paragraph 19(4)
of the Schedule so far as they do not conflict with that need. Those matters are: the views of the employer
and the union; existing national and local bargaining arrangements; the
desirability of avoiding small fragmented bargaining units within an
undertaking; the characteristics of workers falling within the proposed
bargaining unit and of any other employees whom the CAC considers relevant; and
the location of workers.
48. The Panel’s first responsibility is to
decide whether the Union’s proposed bargaining unit is compatible with
effective management. The Panel’s
decision has been taken after a full and detailed consideration of the views of
both Parties as expressed in their written submissions and amplified at the
hearing.
49. The Union, in its submissions, stated
that the Employer had a total of four sites: Macclesfield Road, which included the
Laser Shop in Abbey Green Road, as well as the sites at Longton, Cheadle and
Milton. It also made reference to the
Barnfields site in its written and oral submissions. The Employer, however, stated that there was
a total of six sites within the group, with the Laser Shop being treated as a separate
entity from the Macclesfield Road site.
The Union claimed that prior to its application the Macclesfield Road
site had encompassed the Laser Shop and that its application was made with this
in mind. The Panel is satisfied that the
Union’s intention had always been to include the Laser Shop in its proposed
bargaining unit.
50. The Panel, having carefully considered
the bargaining unit as proposed by the Union and the alternative bargaining
unit put forward by the Employer, has reached the conclusion that neither is
appropriate in this case.
51. Turning to the Union’s proposed bargaining
unit, the Panel is of the view that it fails on three counts. Firstly, that it was not compatible with
effective management as it did not take into account the management structure
in place within the company. The three sites
at Leek all report to the same manager.
To have a bargaining unit consisting of shop floor workers at two out of
the three sites that formed one group in the management structure, would, in
the Panel’s opinion, affect the Employer’s ability to effectively manage this
group of sites.
52. Secondly, that to isolate two out of the
three sites would lead to fragmentation: there being 99 shop floor workers at
Macclesfield Road, five at the Laser Shop and 12 at the Barnfields site. Thirdly, the Panel has taken into account the
location of the workers. The Panel has
examined the list of workers provided by the Employer during the course of the
hearing that detailed those workers that had been transferred between sites
this year. The Panel has identified that
there is an interaction between the three Leek sites that does not exist
between the Leek sites and the sites further afield. This, in the Panel’s view demonstrates that whilst
there is inter-site interaction, it is, in effect, limited on a geographical
basis.
53. Turning to the Employer’s argument that
the bargaining unit should comprise all shop floor workers across all six sites,
the Panel, as stated above, is convinced that there is not the degree of
mobility across the six sites that the Employer had suggested. This is clearly demonstrated by the data the
Employer provided to the Panel during the hearing. The Panel accepts the Union’s point that the
workers in Leek see themselves as separate from the sites further afield, but
the Panel considers that the Barnfields site, because of its shared management,
would not be seen in the same way as, for example, the Cheadle site which is
managed as a single unit.
54. As to existing local or national
bargaining arrangements, the Panel is not convinced that the Company Council is
a bargaining forum. The Panel would
refer to the conflicting submissions of the Employer in support of this
conclusion. In its written submissions
the Employer stated that it was not possible for the Panel to refer to existing
arrangements yet, when questioned by the Union during the course of the
hearing, it claimed that the Council had a role in collective bargaining
“across the board”. However, the
Employer did not explain how the Council took part in collective bargaining nor
the arrangements that were in place during the 13 month interregnum when no
meetings were called. Whilst the Panel
accepts that the Employer takes on board suggestions from Council meetings,
nonetheless the Panel is satisfied that it does not engaged in collective
bargaining as traditionally understood. Irrespective
of the specific role it plays, this would not prevent the Union being involved
in the Council in some shape or form.
55. The Panel is of the view that the
appropriate bargaining unit in this matter is all shop floor workers below the
level of foreman at the three sites in Leek, that is the sites in Macclesfield
Road, Abbey Green Road and Barnfields Industrial Estate. This is a bargaining unit that fits into the
Employer’s management structure and would accordingly be compatible with
effective management. It is not a
fragmented bargaining unit nor would it lead to fragmentation elsewhere. The sites are within close proximity of each
other and the workers at these sites exhibit a degree of inter-site mobility
that is not shared with the other sites.
Decision
56. The Panel has decided that the
appropriate bargaining unit is all shop-floor
workers below the level of foreman employed at the Employer’s sites in
Macclesfield Road, Abbey Green Road and Barnfields Industrial Estate.
57. This bargaining unit differs, for the
purposes of paragraph 20(1)(c) of the Schedule, from the bargaining unit
proposed by the Union in its application.
It will therefore be necessary for the Panel, in accordance with
paragraph 20(2), to determine by way of a separate decision whether the Union’s
application is valid under paragraphs 43-50 of the Schedule.
Panel
Professor
Frank Burchill
Mr
David Bower
Ms
Bronwyn McKenna
13
August 2004
Appendix
Names
of those who attended the hearing:
For the Trade Union
Geoff
Bagnall
Karl
English
Lawrence
Shaw
For the Employer
Peter
Gavin
David
Klucznik
Robert
Maddox